What is driving the price of bitcoin? An analyst responds

Bitcoin (BTC) futures contracts and options, which far outstripped spot or spot market volume, have declined markedly in recent weeks, Willy Woo noted in his latest market bulletin. Meanwhile the price boost is due to intensive investor buying.

Of the widely speculative market at the beginning of the year, in which high levels of leverage were used, has moved to a market where spot volume dominates, says the analyst. From a strongly bullish phase for bitcoin that manifested after January, speculative markets have turned skeptical, Woo notes.

Funding rates for long positions are neutral at the moment, says the specialist, which is far from the first quarter, when demand for long positions was enormous. The number of bitcoin contracts currently in force is at low values, highlights the analyst, as can be seen in the following graph.

Bitcoin futures contracts and funding levels are at minimum values. Source:

The strongest price validation the market can have

The reduction in the levels of leverage and the volume of futures have as a consequence that the price of BTC is driven by a strong activity of spot purchases, on the part of long-term investors, says Willy Woo.

This environment in which the spot dominates produces a moderate increase in volatility, with much less volume traded than usual. Although many traders believe that low volume would invalidate the price move, in reality buying by investors is the strongest price validation the market can have.

Willy Woo, Bitcoin Market Analyst.

In relation to the reduction in leverage for futures trading, in the last weeks of July the exchanges Binance and FTX capped leverage levels to 20x for futures trading, as reported by CriptoNoticias. This reduction was apparently due to pressure from regulators in different parts of the world, specifically on the futures market.

There were also declines in BTC traded volumes on exchanges, as well as lower volumes in futures and options in the last week of July, despite the price rally from the low of $ 29,000, as we report here.


Tammy Sewell is our Writer and Social at Tammy loves sports, she writes our celebrities news. She spends time browsing through several celebs news sources as well the Instagram. Email: Phone: +1 513-209-1700

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